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I shall propose as soon as I have an opportunity, we provide for a considerable reserve of armour-clad ships in our ports. I should observe that my right hon. Friend the Secretary of State for War has had to incur a heavy expenditure in providing guns not only for the fortifications, but also for the navy which has undergone a complete change of armament, and that in the naval Department the cost of fitting the ships for their new armament has been a very heavy item of expenditure. I think, therefore, I have shown that there is some reason for increased expenditure; and with these general observations I shall reserve further explanations till I come to propose the Navy Estimates for the year.

MR. SAMUDA said, that, notwithstanding the great necessity which the First Lord of the Admiralty alleged to exist for strengthening the navy, the work proposed to be performed in the dockyards was reduced from 24,000 to 14,000 tons, the saving to be effected by which reduction might be roughly calculated at nearly £500,000.

MR. CORRY explained that he had spoken principally of works to be executed by contract, and not in the dockyards.

mouth and Plymouth would be rendered untenable in time of war if the war was of a severe or aggravated character.

GENERAL PEEL: Sir, I am under a disadvantage, not only in being unprepared for the debate, but in not having heard that debate. It appears to me that speeches on fortifications have no reference whatever to the subject before us—namely, the increase of the annual expenditure. The present Government have no responsibility whatever with regard to those fortifications. They were decided upon by Lord Palmerston's Government, and on taking Office I distinctly disclaimed all responsibility for them. The hon. Gentlemen who spoke last does not seem to be aware that though the sum necessary for the erection of the fortifications was proposed to be provided by money raised by a loan, the armament for them was to be provided for out of the annual Estimates. The original Estimate for that armament was £1,885,000; but when I came into Office in 1866, only £85,000 of that sum had been charged in the Estimates. The country was a gainer by the delay; for otherwise there would probably have been a very bad gun at three times the cost that MR. SAMUDA said, it was true that was ultimately incurred: but it is not fair £245,000 was taken in the Estimates to to turn round on the Government and be expended on contract ships this year blame them for an increase in the Estimates beyond the sum so spent last year; but if because they have provided this armament. he took from the saving in the dockyards I think that had I been present when the the amount proposed to be spent on con- right hon. Gentleman the Member for tract ships, there ought to be a reduction South Lancashire (Mr. Gladstone) spoke, of from £200,000 to £250,000 in the I should have been able to show that it Estimates; instead of which there was an was not only very unreasonable, but very increase of £200,000. He was astonished unwise, to make a comparison between the to hear from the Secretary of State for expenditure of his Government and of the War that they might expect to pay no less present one. When I came into Office in a sum than £4,000,000 for guns for the 1859 the total expenditure for which I was fortifications, and he maintained that the responsible was £13,500,000, but the expenquestion of those fortifications demanded diture in that Department went on increascareful revision. He was surprised to hearing while the right hon. Gentleman was that no less than £1,300 would be required for testing the 9-inch gun, and £2,000 for the 12-inch gun. It would be impossible in time of emergency to furnish an adequate garrison to man and fight those guns. He believed the best policy in view of invasion would be the carrying of our defences further inland, so as to increase the distance between the point of disembarkation and the place of attack. It was a matter for serious consideration whether a number of arsenals and dockyards which could only be available in time of peace ought to be maintained. Such places as Pembroke, Chatham, and Woolwich might be preserved, but Ports

Chancellor of the Exchequer to £16,000,000 and upwards; and in 1866 our armaments were in much the same position that they had been in 1859. When I came into Office we had not a single rifled gun. I introduced those 12-pounder Armstrong guns which have, I hope to hear in the course of a few days, been so very effectual in Abyssinia; but the Government of the day, though urged to wait for some further trials, went in for the larger Armstrong guns, which cost upwards of £3,000,000, and all of which proved a failure. As to a comparison of Estimates, it must be remembered that Estimates are only an

approximate calculation as to the cost of contemplated works. If you construct the works for a smaller sum than the Estimate, of course that is a saving; but if you do not construct necessary works at all, there is no saving. Now, in 1865-6 there was a saving of £500,000 in the manufacturing department; but that saving was owing to the partial suspension of operations in the Royal carriage and other factories, through the pattern of wrought-iron gun carriages not having been determined upon, and through other changes being anticipated. But because such expenditure was deferred, is it right to turn round on the Government and blame them for the outlay which was ultimately necessary? Then as to the increase of pay, that followed upon the Report of the Royal Commission on Recruiting; and that Commission was appointed because you could not get enough recruits. For my own part, I shall always recollect with pride the part I took in providing better weapons, and in granting the soldiers increased pay.

THE MARQUESS OF HARTINGTON said, that, not having heard the remarks either of his right hon. Friend (Mr. Gladstone) or of the right hon. Baronet (Sir John Pakington), he would not now attempt to enter into the discussion; but he should be ready on another occasion to discuss the points which had been raised. As to the large increase in the Votes for Army Purposes having arisen from the necessity of supplying large guns and from the increased pay of the troops, he maintained that those two items did not account for the whole, or nearly the whole, of that increase. He always contemplated the probability of a large additional expenditure for the supply of heavy guns for naval purposes and for arming our fortifications; but it was hardly fair to blame the late Government for not taking action in the matter. Their principle was to provide the armament for the ships and fortifications which would be ready within the year, and this was the most prudent course that could have been pursued. As he had before remarked, it was easy to find good reasons for increasing any particular Vote; but those on whom the responsibility rested were bound, not only to see in what way money could be usefully expended, but in what way it could be usefully saved. He did not say that it would have been possible for the late Government to practise greater economy than the present, but the two items which had been

referred to did not account for the total increase; and it rested with the Government to show, not only that extra expenditure was necessary in those items, but that retrenchment was impossible in others.

SIR CHARLES RUSSELL said, he attributed the present excessive expenditure, to a great extent, to the outlay incurred in fortifications. The misfortune was that Parliament legislated on that subject during a panic. The House were now defraying the expense of that legislation; and it was very hard upon a Government which had not proposed the fortifications to have to incur the unpopularity of the Vote for arming them. According to the evidence of Sir Richard Airey before the Commission on Fortifications, when the embrasures in the fortifications had been made, there was not one gunner in the service, for every gun it was proposed to mount in them. As to the fortifications themselves, they somewhat resembled the towers which were seen in different parts of the country, and which were called So and so's "Folly." They were now erected, but it was quite worthy of consideration whether the Government should arm them with guns or not. Another Government, however, having built the forts, the House could not blame the present Government for proposing to put arms into them.

MR. DALGLISH said, that having been one of those who opposed the scheme of these fortifications, he was gratified to find that the general opinion now was that they were a mistake. He wished the Government would consider whether it would not be better to delay for a time providing them with guns.

MR. LAING observed that the discussion had hitherto been directed rather to the army and navy expenditure than to the question of Ways and Means. The broad situation was that, apart from the Abyssinian expenditure, the ordinary Estimates of expenditure had been increased by £3,000,000 or £4,000,000 during the last three or four years; and that not only had a surplus of £2,500,000 disappeared, but the balances had been reduced by about £1,000,000, excluding from the reckoning the Abyssinian outlay. That was not a satisfactory state of things. There were reasons apparent to every one why it would not be fair to charge this increased expenditure upon the present Government, and why a great portion of it

was inevitable. This, however, was no ties which had become deranged through reason why they should persist in charging that falling in. Coming to the question to direct taxation-in other words, to the specially before the House, he thought the income tax-the whole of the increased House had lost sight of the origin of the taxation that had become necessary. He argument. They had been of late years had always been in favour of the income so accustomed to large surpluses - the tax; but there was danger, at a moment average annual balance in favour of the when they were about to enlarge the con- Exchequer having been £2,750,000 — stituencies of the country, in establishing a that it was difficult to appreciate the fact precedent for throwing every unexpected that they had suddenly dropped into the or inconvenient amount of expenditure upon position of having two years' successive direct taxation in the shape of the income deficits. There were, in fact, three detax. During the Crimean War a certain ficits contemplated in the Budget of the balance was preserved between direct and Chancellor of the Exchequer-a deficit last indirect taxation. He quite agreed that it year, one for the present year, and the was not desirable to alter the rate of tax- Abyssinian deficit. Omitting the expendiation upon articles of general consumption, ture on account of the Abyssinian Expedior to impose taxes affecting our commerce tion altogether, he found that the original for a merely temporary object. If, how- Budget expenditure of last year for the ever, this increased scale of taxation were various services was £40,233,000, which to be maintained in future years, it would amount was increased by a supplementary be dangerous if a fair proportion were not Estimate to £40,449,000. The Budget thrown upon other classes of the commu- expenditure for the present year under nity besides those which paid income tax. the same heads was, on the other hand, Another point to which he wished to refer £41,863,000, from which was to be dewas as to the policy of raising money by ducted the difference between the extra taxation for the purpose of reducing the receipts which came into the Treasury National Debt. When he opposed the this year and last year for the navy and the Government scheme of last year he did not other services, leaving as a net result above suppose that his predictions would meet £41,050,000-which, compared with the with so speedy a verification. The prac- original Estimate of last year, gave an tical effect had been to add £1,000,000 a increase in the Budget of the present year to the charge of the country, which year in which the country was informed had been withdrawn from the balances, that there was to be a considerable deficit and to borrow £1,000,000 at a higher rate of interest. Where was the difference between such a scheme and Mr. Pitt's sinking fund? To convert a debt into terminable annuities was the scheme of a sinking fund in the worst of all forms. The sound principle was to keep the expenditure down to the lowest point consistent with efficiency; to make the Estimates on such a scale as would ensure a surplus within the year, and then-adjusting the burden of taxation fairly between direct and indirect taxation-to trust to the gradual reduction of the Debt by means of the accruing surplus of the year. MR. CHILDERS said, that, with respect to the National Debt, the short answer to his hon. Friend (Mr. Laing) was, that for many years the policy of the House of Commons had been to apply a very considerable sum to the reduction of the debt by means of terminable annuities. These had to a great extent fallen in, and the policy of last year was no new policy, but simply an endeavour to redress the balance between permanent and terminable annui

of over £800,000. To this might be added the difference between the estimated sales of old materials in the two years, which was against the present Budget. He, for his part, had always insisted that this head of income ought not to be mixed up with expenditure, and ought not to be taken into consideration, when making a comparison of the Estimates of one year with those of another, but the contrary view had been strongly maintained by others; and, taking it to be the right course to adopt, it would be found that the difference between the Estimates of last, and those of the present year, was no less than £1,034,000. Now, that was an increase which he thought justified hon. Members in considering whether or not it was not absolutely necessary that some rigorous measures should be adopted to cut down, where practicable, some portion of the public expenditure. It had been said by more than one hon. Gentleman opposite-that the proposed increases of expenditure were inevitable, and he did not dispute that from year to year it was found

tract work compared, the result would have been very different. There were other questions connected with the expenditure for the navy which had been touched upon by his right hon. Friend the First Lord of the Admiralty; but he should not advert to them on the present occasion, inasmuch as an opportunity for doing so would be offered when the Navy Estimates came on for discussion. There was no doubt of this, that the Estimates had been increased in two years by £2,750,000, and this was not a satisfactory state of things.

SIR JOHN PAKINGTON said, he would inquire into the statement with regard to the testing of guns, which he confessed had a startling appearance. If he had been favoured with longer notice he would have done so in time for this discussion.

to be absolutely impossible to prevent the increase of some items. But it was the part of a wise administrator, when expenditure was inevitable on some heads, to see whether it could be reduced on others. But this is just what hardly appears in any of the Estimates of the present Government. His right hon. Friend opposite (Sir John Pakington) for instance, stated that the guns cost more than they used to do. The question then arose, whether fewer guns might not be required? [Sir JOHN PAKINGTON: I told you the exact number of guns you would want.] He was about to apply the principle in another direction. It was said that the maintenance of men was more costly than it used to be. The question then came, whether they could not dispense with some of the men? When the right hon. Baronet was at the Admiralty last year there was no reduction in the men. THE CHANCELLOR OF THE EXCHEThis year the right hon. Gentleman now QUER: I think, Sir, I may safely say no at the Admiralty made a considerable re- one has ever heard me complain of this duction, while the right hon. Baronet, hav- House jealously watching any increase of ing been transferred to the War Office, had public expenditure; on the contrary, I made no reduction there. The probability think discussions of this nature greatly was that he was as much in error in the strengthen the hands of the Treasury in one case as he was in the other. But controlling that expenditure. If anyone a plea was put up that the increased ex- will turn to the votes I have given since I penditure was due to warlike stores. To have been a Member of this House he will make quite sure that the comparison was find they have always been given in favour just he had compared all the Votes for of economy. But when the right hon. this purpose in recent years, and he found Gentleman the Member for South Lancathat the Estimate for warlike stores was shire (Mr. Gladstone) came down to the this year £1,491,000, as compared with House the other night, and charged the £1,457,000 in 1865. present Government with extravagance, I thought it my duty to call the attention of the Committee to certain considerations he had entirely omitted." I ventured to say that the right hon. Gentleman was responsible for the expenditure he referred to. position I re-affirm, notwithstanding that the right hon. Gentleman has controverted it to night. There is no question that a large increase of expenditure was proposed last year; and I say that the right hon. Gentleman was bound, if he knew of sound reasons for objecting to that increase, not only to have stated his objection, but to have taken the sense of the House upon the subject. The right hon. Gentleman has said that it was not proper at that time to divert the House from the graver subject under consideration; but that I contend is not a sufficient excuse, for the right hon. Gentleman was not only a Leader of a majority of the House, but had filled a very important office, which he had lately vacated. He was also surrounded by hon.

SIR JOHN PAKINGTON: A great deal of the expenditure was laid out, not in the manufacture of guns, but in various items rendered necessary in connection with their alteration.

MR. CHILDERS observed that it was for this reason that he had thrown the two items together; and in the aggregate Vote the whole increase in three years was only £34,000. Whether the Estimates had been worked up to more in one year than the other was another question. He could not think that every 12-inch gun cost £2,000 to prove it. He believed that, on this subject, the right hon. Gentleman had not correct information before him. As to the navy, the expense of armour-clads had been dealt with unfairly, for comparisons had been made with an exceptional year, which furnished no correct idea of the general expenditure. Had the years 1864 and 1865 been taken into account, and both dockyard and con

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Gentlemen who were all as thoroughly informed as the Members of the existing Government on the question he raised, and was, therefore, competent to advise the House. But what happened? The right hon. Gentleman acceded to the proposed expenditure. No doubt the right hon. Gentleman was assured by his Friends, who had presided over the Department concerned, that the increased expenditure was necessary. I said the other night that it was questionable whether cutting down expenditure was always economy, and increasing expenditure always extravagance; it was a question whether the unwise parsimony of the right hon. Gentleman's own administration had not caused the increased expenditure of last year. I challenged the right hon. Gentleman as to the question of arming the troops; I challenged him on the question of providing a sufficient number of ships for the relief of our stations, but the right hon. Gentleman to-night only repeats his generalities, and altogether avoids taking up my challenge. He does not at all refer to those points in which I said an increased expenditure had been rendered necessary. The Committee will, therefore, readily agree with me that the right hon. Gentleman is a year behind time, and that he is not right in saying that the expenditure we recommended last year was not fully justified. The right hon. Gentleman intimated that since he left the Treasury there seemed to have been no controlling power there. That statement I entirely deny. I consider that it is the duty of the Treasury to resist any application for unnecessary wasteful expenditure, but to assent to any increase of expenditure which is demanded by the exigencies of the public service. The Government would be betraying its trust if it did not acquiesce in expenditure shown to be necessary. That is my view regarding control; and I can assure the right hon. Gentleman that these increased Estimates have been subjected to the most rigorous examination, and that everything has been done to cut down expenditure to the lowest point consistent with the requirements of the public service. The right hon. Gentle man has spoken of our expenditure entailing further charges in future years. I reply that the present Government is in a similar position as regards former Governments. What was the Vote which recently occupied the House, relating to Consular buildings in Japan and China. Was not that a legacy from Lord Palmerston's Govern

ment? The policy of that Government was to increase our trade with China and Japan, and that course necessitated the placing of agents in various places. We have been required to find residences for those agents, and the expenditure was made on the recommendation of an officer sent out by the late Government. Therefore we have been obliged to propose extraordinary expenditure on account of measures originating with our immediate predecessors in Office, though the right hon. Gentleman says we have no legacies left from the late Government.

MR. GLADSTONE: What I said was that the legacies left by the late Government tended to a progressive decrease in expenditure.

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THE CHANCELLOR OF THE EXCHEQUER: I will take a case. The late Secretary of State for the Home Department (Sir George Grey) recommended an increase in the pay of the police. apprehend the right hon. Gentleman was a party to that measure, and I do not find fault with it. In fact, the pay of almost everybody having been increased, it was found the police force could not be properly recruited without raising the pay. The right hon. Member for Morpeth (Sir George Grey) sent a circular to all the counties, and suggested an increase in the pay of the police. That suggestion has been very largely acted on, and as the Treasury contributes 25 per cent of the constablary pay, the proposal has resulted in increased Imperial expenditure. Those who scrutinize the Estimates carefully will find that very little of the increased expenditure of the year arises from new schemes; but that it is almost wholly occasioned by the continuing of measures set on foot by the late Government. It must also be remembered that the House is continually passing measures for the improvement of the country, and requiring Government to take the superintendence of such improvements. In this way a large increase of expenditure has been rendered necessary within the last two or three years by measures which have received the general assent of the House. There has been legislation for increased education, and for sanitary improvements. We have to pay for our improved civilization, and for the greater comfort that is now enjoyed by all classes of the people. Hon. Members, therefore, who press these proposals forward must not complain if, when their wishes are complied with, the Executive Government comes forward with

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